Comments on: Free Calls for Ads with Blyk

By: Hamish MacEwan

Hamish MacEwan — Mon, 20 Nov 2006 06:15:59 +0000

“But if we take $50 CPM (certainly at the top end of the scale) to run banner ads, you‚Äôd have to show each user 1,520 ads a month or 50 ads a day to be recoup these costs. Take a more relatistic (if still high in comparison to the web) of $10, this adds up to a whopping 500 a day.”

$50 CPM => 50/day
$10 CPM => 250/day not 500/day.

I think 250/day is still excessive, but then again, you based the analysis on the highest ARPU in the UK industry, perhaps Blyk’s aspirations aren’t so lofty.

By: Terence

Terence — Mon, 13 Nov 2006 13:35:43 +0000

My question is: will they run the same model for mobile advertising? I don’t know, correct me if I’m wrong, and I might be, since I’m talking from Brazil – where we’re somewhat lagging behind on many mobile market areas, mobile advertising definitely one of them – but couldn’t they use the screensaver idle time?

By: Jason Devitt

Jason Devitt — Wed, 08 Nov 2006 02:38:10 +0000

John,

I am aware of the fact that Blyk is an MVNO. It is still possible for them to have a lower cost base than the carrier that they rent from. Correct me if I’m wrong, but Virgin charged less than T-Mobile in the UK and still made more money per user, despite renting T-Mobile’s network.

This is because the costs that matter are the cost of acquiring a customer and the cost of customer support. The actual cost of renting the network is small compared to these.

Blyk should be able to achieve the lowest cost of acquisition in the industry, because a lot of people will flock to a service that is free. And since the overwhelming majority of customer support calls that a carrier fields are related to billing, zero billing means near-zero customer support.

I am still a skeptic, though.
Jason

By: Russell Buckley

Russell Buckley — Tue, 07 Nov 2006 13:22:43 +0000

Brian – to paraphrase John, I think you underestimate how much experience I actually have in this area. Not only have I run over 1500 location based mobile campaigns back in 2000/1 and wrote a widely circulated and respected White Paper on this area (email me for a free copy). But I’m deeply involved in mobile advertising in my day job for AdMob.

I have also consistently carried the torch for location based services, during the last 6 years when many players in the value chain have questioned it or written it off altogether.

So I can tell you quite definitively that, broadly speaking, far, far more people respond to non-location mobile marketing than location based messages.

Location does have a place in mobile marketing, but it’s very very far from being “key” as you suggest. If you want me to actually put a figure on it, I’ll go out on a limb and say that it’ll pan out that less than 5% of messages will eventually have a location element.

Russell

By: John

John — Tue, 07 Nov 2006 12:49:05 +0000

Brian – I don’t think anyone here underestimates it – but an advertiser will be offered a choice of placing adverts with Blyk, a network which has a small base of customers who probably don’t have any money anyway, or spending probably less CPM and using existing methods to every other mobile network customer.

Location will effectively double the cost of the adverts to the advertiser. My experience is that they won’t pay that.

By: Brian

Brian — Tue, 07 Nov 2006 11:17:54 +0000

I think you have underestimated the value of mobile advertising. Users are unlikely click though an advert and read a corporate website, or start shopping on thier mobile. But if they receive an ad for the ‘Next Sale’ complete with directions to the nearest Next store, sent to them when entering a town centre, then that will be a lot more effective than 100s of banners on websites

The key to mobile advertising is location.

By: John

John — Mon, 06 Nov 2006 10:02:16 +0000

Jason – they are an MVNO – they can’t be cheaper than the most efficient network because they are hosted.

I can’t wait to see how this one pans out, but Gizmondo tried having ad funded games consoles (delivered via mobile on a hosted mobile network basis, and this sounds like the same thing.

By: technokitten

technokitten — Sun, 05 Nov 2006 17:12:12 +0000

I looked at the Blyk story too. And I looked at the maths and believed it to be untenable. It’s not just the volumes of ads, but the kinds of people who will be tuning them out. If you’re so bothered about free calls/texts, you’ll ‘appear’ to consume as many of the ads as you need to in order to get your freebies. But that might mean just keeping your phone on a certain wap page or similar. And you soon learn to tune them out.

Of course, they could be trying the spotcast model again where your calls are interrupted with adverts. And if it didn’t work last time, I can’t imagine it working this time either.

So yes, maybe we *are* in a bubble. I just hope that more sensible investments are made with better management, business models and implementation so that we don’t end up crashing by 2008.

By: Leo Fish

Leo Fish — Sat, 04 Nov 2006 21:41:33 +0000

Google *IS* evil.

They are the new Microsoft but far more dangerous and ubiquitous. Their own stated goal is to organise (and manage and control) all the world’s information and services. Where does that leave opporunties for other small local and mid-sized business around the globe.

Their slogan “do no evil” is a farce……like with all power, comes greed, corruption and control.

By: Olli

Olli — Sat, 04 Nov 2006 10:02:54 +0000

Very interesting and convincing article noticing you are within your profession ! Olli